Upwork recently changed a lot of their policies in order to improve their business model. However, just like any other major change on a popular platform, lots of folks aren’t happy with what Upwork have done.
In this article, we’ll cover all the changes Upwork made recently but also we’ll cover questions like ‘Is hiring on Upwork worth it these days? What are Upwork fees now? and What are the best alternatives to Upwork?
Why Upwork Changed Their Fees
Whenever big platforms make changes plenty of people get upset and frustrated, often it’s just because of the very fact that something has changed rather than because of what the specific actually is.
Now, in this case, there’s a genuine reason for people to be upset, these latest Upwork changes hit both employers and freelancers right where it hurts the most, in the wallet!
Here’s a before and after of how things work on Upwork now:
The second major change is that Upwork now make freelancers pay to submit a proposal to employers. They say this is to reduce the quantity and increase the quality of proposals submitted but to many, this just looks like money-grabbing by Upwork.
Upwork started charging for “Connects” (virtual tokens for freelancers to be able to submit proposals for jobs) which resulted in pretty big drama on social media, as freelancers are expressing their outrage and frustrations about these changes.
Clearly, Upwork is now focused on revenue and on focusing on their existing 12 million freelancers at the expense of making it harder for employers to find new talents.
As for the reason they said “We want to help professional freelancers win more jobs. With paid Connects, we expect fewer freelancers will submit fewer proposals, increasing your likelihood of winning projects and making it easier for clients to identify high-quality talent.”
Jessica Tiwari, VP of Product at Upwork stated “We are always looking for ways to ensure Upwork is the best solution for professional freelancers searching for new projects as well as businesses who need freelance talent to help reach their goals. While it’s never easy to make a big change like this, we decided it was time to take this step to make Upwork an even better place for professional freelancers and clients.”
Many employers and freelancers disagree that this is a step towards improving the creation of new relationships as both sides are now suffering from larger fees.
Top freelancers may remain unaffected by these changes, but new high-quality talents are facing not just bigger fees, but the same old problem fighting to get noticed to get their first jobs on Upwork.
How it Works Now on Upwork
Upwork now charges employers 2.75% fees on whatever payments they send to freelancers, and it’s called a Payment Processing Fee.
This fee does not change, no matter how long you hire on Upwork, no matter how much money you already sent to freelancers on Upwork, you still pay 2.75% fee on every payment you make through Upwork.
The other side of the recent changes are more focused on freelancers. Nowadays, they must pay for Connects and on certain milestones, Upwork is taking additional new fees from them too.
Until the latest fee increase, Upwork has had a flat structure of 10% on every project, taken from the freelancer’s payment.
Now, things have changed, and Upwork has a different pricing model:
Freelancers will pay a commission based on their relationship with the client:
- 20% for the first $500 with a single client
- 10% for the total billings between $500.01 and $10,000
- 5% for the billings that exceed $10,000
Thoughts on this are various and totally depend on the point of view. Some think this is unfair to new high-quality freelancers, and some think it will filter the good ones from bad ones.
Whatever your point of view, Upwork obviously thinks it’s the best option for everyone and as a giant in the industry, they can set a new standard.
How to Avoid Upwork Fee Changes?
It’s absolutely normal that many employers just like freelancers are looking for alternatives in order to avoid the extra fees on Upwork.
Whilst small percentage fees may not feel like much if you are hiring for a one time $100 project, when you add in the fees the freelancers pay things start to add up. If you are looking for a part-time or full-time remote worker, then the fees are really going to have a significant impact on both parties.
For a $1000 salary you’d send on Upwork, you’d pay $27.5 to Upwork and your worker would pay $100, which means Upwork would take $127.5 of just one salary payment!
It’s not surprising that you and your remote employee would start considering alternatives.
As the 2.75% fee is inevitable on Upwork, many employers are looking for alternatives that don’t take a cut of ongoing payments.
There are many options out there with job boards helping employers to find their perfect freelancers and team members no matter their needs.
Some of the best job boards that we hear great things about include sites like We Work Remotely, Remoteok.io and remote.com where you can find good remote workers from $299 to post your job.
If you’re looking for the very best freelancers and jobseekers, at great value and with no payment fees or commissions ever… then JobRack is the place for you!
Adopting a platform like JobRack allows you to hire high-quality remote workers from Eastern Europe and control your expenses. Here at JobRack, we don’t take any ongoing fees from job seekers or employers. Just a super simple one time fee for posting a job for employers.
After you find your talent it’s completely up to you and your remote employee how you want to handle payment transactions. No fees anywhere in sight and we’ll even help advise you on the best payment platforms to minimize your costs even more!
Lot’s of our employers asked us for advice when it comes to paying remote workers, and we reviewed all the best options in our blog post “How to Pay Your Remote Employees and Freelancers”.
We found an amazing solution that takes less than 1% of the transactions, and we liked it so much we now use it for all of our payments here at JobRack, feel free to check it out here!
Conclusion – Is hiring on Upwork Worth it?
That definitely depends on what you are looking for.
If you have a big business and need a professional for a certain project then Upwork can still be a great choice. With over 12 million freelancers, you will most certainly find a professional capable of getting the job done properly. Just bear in mind that you might face pretty high costs for the best professionals now that freelancers are increasing their rates to take into account these recent fee increases.
However, if you are looking to hire an amazing team member that will commit to you and your business then Upwork is probably not the best place for that.
Here at JobRack, we have over 6,000 high quality, verified, job seekers, and are very proud of the fact that our employers find the perfect fit for their role and frequently keep their team members for multiple years. Every day they recognize and get the many benefits in hiring Eastern Europeans for their business.